Peres Meets with Religious Parties to Form New Government

JERUSALEM (AP) _ Labor Party leader Shimon Peres today held talks with key religious parties aimed at building a new governing coalition to replace the right-wing Likud bloc’s caretaker government.

In another development, the director of the Government Press Office disputed a State Department report that the Palestine Liberation Organization was adhering to its pledge to renounce terrorism.

Peres’ moves followed his designation by President Chaim Herzog on Tuesday to build a government to replace the Likud-Labor coaltion Cabinet toppled in a Parliament vote of no confidence Thursday.

The decision by Herzog brought renewed calls in Likud to oust caretaker Prime Minister Yitzhak Shamir as party leader since his party could be excluded from the government for the first time in 13 years, Israeli newspapers said.

Peres said he telephoned Shamir today and asked him to meet to discuss forming a new joint coalition. Shamir refused, Peres said on Army radio.

″Mr. Shamir’s response was that they have a decision not to join a Labor- led government and so he saw no need″ to meet, Peres said.

Industry Minister Moshe Nissim of the Likud bloc said a Labor-led government would cause ″severe political damage to Israel.″

Shamir met today with six other Likud leaders to map out a strategy for blocking Peres’ coalition-building, the radio said.

If Likud can muster 60 votes in the 120-member Parliament they can prevent the 66-year-old Peres from becoming prime minister.

Peres has six weeks to build a coalition and if he fails, Likud could be named to try. But political analysts believed the momentum was in Peres’ hands and that he could outmaneuver Likud if he acted quickly.

Israeli news reports said Peres hoped to present a new Cabinet to Parliament for a customary vote of approval by next week.

Peres was optimistic after a two-hour meeting with the five-member Agudat Israel party. He said on the radio that an ″agreement was emerging,″ with the pivotal ultra-Orthodox party.

The agreement was based on Labor promises to provide funds for religious seminaries and housing in exchange for a freeze in ultra-Orthodox demands for controversial religious legislation, Peres said.

Together with Agudat, the left, and Arab parties, Labor would have 60 votes for a government, meaning that it would still need to win over at least one of three other religious parties.

Labor leaders viewed their best chance as an alliance with the ultra- Orthodox Shas, or ″Sephardic Torah Guardians,″ which holds five seats in Parliament.

Shamir’s 15-month-old coalition collapsed on a no-confidence motion after Shamir refused to accept a U.S. plan for starting an Israeli-Palestinian dialogue. Peres has already pledged that as premier he will accept the compromise proposals by Secretary of State James A. Baker III.

Regarding the State Department report on the PLO, the director of the Government Press Office, Yossi Olmert, said it ″is not relevant to reality.″

″The PLO continues to be deeply involved in terrorist activity against Israel, both in Israel proper and in the occupied territories,″ he said in a statement.

At the same time, the army chief of staff, Lt. Gen. Dan Shomron, was quoted as saying there was no proof that PLO chief Yasser Arafat’s mainstream faction, Fatah, was carrying out attacks against Israel.

The State Department report listed nearly 30 border and rocket attacks by Palestinian groups against Israel since Arafat renounced terrorism in December 1988. But it added: ″We have no evidence in those cases or any others that the actions were authorized and approved by the PLO Executive Committee or by Arafat personally.″

Israel has maintained that the PLO is a ″terrorist organization″ and has urged the United States to end its dialogue with the PLO.

A government report provided by Olmert said that in 1989, there were 12 attacks by Fatah within Israel; 15 attempts at cross-border attacks; and two firings of rockets at farming settlements.